U.s. Pushing For Settlement Of Chip Dispute

March 13, 1986|By Bill Neikirk, Chicago Tribune.

WASHINGTON — The Reagan administration is pushing to settle a major trade dispute with Japan over the sale of computer chips to the Japanese market. The U.S. wants the matter settled before Prime Minister Yasuhiro Nakasone meets with President Reagan here on April 12, administration officials said Wednesday.

The officials said that Reagan and Nakasone would like to avoid contentious issues at their conference but that it might take at least two more hard negotiating sessions to achieve a breakthrough.

The talks thus far have been difficult, with Japan last week rejecting market-opening proposals by U.S. trade negotiator Michael Smith. Clayton Yeutter, U.S. special trade representative, reported ``good progress in some areas`` but said that the Japanese ``responded negatively in other areas. I`m not sure how one balances the two out.``

Yeutter said it was unrealistic on the part of the industry to expect an agreement to be reached at the first negotiating session.

American semiconductor companies have filed a complaint with the U.S. government, contending that the Japanese are engaging in unfair trade practices by effectively denying them access to the Japanese market. Reagan has until July 10 to make a ruling but has put the case on an expedited schedule.

The U.S. law governing the case gives the President broad authority to order trade restraints against the Japanese, providing important leverage for Reagan in the talks.

Many U.S. officials regard this as one of the most important trade cases of 1986, because it involves one of the nation`s most technologically advanced industries. Semiconductor companies have attacked on several fronts, filing complaints with the Commerce Department contending that the Japanese are dumping computer chips below cost in violation of international rules. The department issued a preliminary ruling in favor of the industry Tuesday in the case of one kind of sophisticated chip.

Yeutter indicated that enforcement of the antidumping laws against the Japanese is nonnegotiable. ``We should implement our dumping laws irrespective of the outcome of the other cases,`` he said.

But the dumping cases, as well as the complaint alleging unfair trade practices by the Japanese, give U.S. negotiators considerable leverage in forcing an agreement with the Japanese, one White House aide said. He said tough antidumping action by the U.S. could sharply cut the Japanese market share.

The semiconductor industry says that it could garner well over 30 percent of the Japanese market if it had fair access. Its market share is now about 10 percent and has never been higher than 12 percent.

``There are a number of sticky points, but I suppose the most difficult one to handle is the issue of market access in Japan, simply because it`s hard for anybody, including the Japanese, to figure out how to do that without totally managing their economy,`` said one senior trade official.